Temporary help agencies (THAs) and recruiters in Ontario will be required to have a licence to operate in the province as of January 1, 2024 to avoid worker exploitation and undercutting.
Inspections by Ministry of Labour, Immigration, Training and Skills Development officers have found that multiple THAs are “illegally paying people below the minimum wage and denying other basic employment rights” to gain an unfair competitive advantage by undercutting rates.
“While temporary help agencies are vital to Ontario’s businesses and jobseekers looking to get their foot in the door, for too long they have operated in a grey zone that allows criminals to prey on vulnerable workers,” said Labour Minister Monte McNaughton. “Our government’s licensing system will ensure law-abiding businesses can have confidence in the THAs and recruiters they work with and that those who abuse workers face the harshest fines in Canada and are banned from operating in our province.”
Many businesses and jobseekers in Ontario are often unaware if an agency or recruiter they are working with is meeting their employment standards obligations or has a history of violations. They will now be able to check the ministry’s online database before working with one, to see if they have met the province’s stringent licensing requirements.
It will be against the law for companies to knowingly use unlicensed businesses for staffing, and those who hire deceitful recruiters will be required to repay workers for any illegal fees charged to them.
To operate their businesses, THAs and recruiters will need to provide $25,000 in the form of an irrevocable letter of credit that can be used to repay owed wages to employees. Offenders could face up to a $50,000 penalty based on repeat violations – the highest amount in Canada.
THAs and recruiters that apply for a licence before January 1, 2024, may continue operating until they receive a decision from the ministry on their application. If a licence or licence renewal is refused, the applicant has 30 days to cease operating as a THA or recruiter.
Applicants have to apply to renew their licence each year.
There were approximately 2,300 placement agencies and temporary help business locations operating in Ontario in December 2022 according to Statistics Canada. About 114,000 full-time employees were employed by temporary help agencies that year.
In 2020-21, ministry inspections on THA use in farms, food processing, storage and warehousing and retirement homes found $4.2 million was owed to more than 10,000 employees.
